Investors Seek Safety in Government Bonds

NEW YORK—Treasury bonds and German bunds became financial markets' darlings as investors flocked to safe-harbor assets on fresh signs of troubles in the euro zone.

The flight to safety pushed down the benchmark 10-year Treasury note's yield, which moves inversely to its price, to as low as 1.909%, the weakest level since the end of February. The yield is less than 0.25 percentage point from a historic low set in September, a sharp...